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Strategies & Market Trends : Young and Older Folk Portfolio
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To: Smart_Asset who wrote (20990)10/6/2025 4:21:39 PM
From: Rincon v2.01 Recommendation

Recommended By
Smart_Asset

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Re: Looks like both are very stable but I could be missing something..

Muni bond CEFs are not at all stable. They are highly sensitive to interest rate changes. Not only that, they are leveraged which means the cost of leverage itself is also sensitive to interest rates. A double whammy. So share price can drop as NAV declines, then you get hit with distribution cuts as the cost of leverage increases with rising interest. These are rollercoasters.

The perfect time to buy was earlier this year, before the Fed cut interest rates. However, as you can see from any chart, prices are still depressed. When interest rates are cut further, NAV and share price will rise, leverage costs will drop, and distributions can rise. That’s why I added to CEV, PCQ, and MUC last month.
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